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  3. nesbit co. has two operating (production) departme

Nesbit Co. has two operating (production) departments supported by a number of service departments. The...

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Accounting

Nesbit Co. has two operating (production) departments supported by a number of service departments. The following information was collected for a recent period:

Direct Costs

Machining

Department

Assembly

Department

Indirect

Cost

Salaries

$122,400

$ 85,700

$36,700

Insurance

20,200

11,000

5,500

Utilities

23,900

13,900

2,000

Depreciation

20,700

11,500

13,800

Maintenance

7,000

4,700

29,400

Office expenses

-0-

-0-

71,100

Cost of goods sold

327,600

121,200

Indirect costs are allocated as follows: salaries on the basis of sales, office expenses on the basis of the number of employees, and all other costs on the basis of square footage. Additional information about the production departments follows:

Square Number of

Footage Employees

Machining 14,535 78

Assembly 4,845 52

Sales for the Machining Department are $724,404 and sales for the Assembly Department are $356,796. Determine the departmental contribution to overhead and the departmental net income for each production department.

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